Bendix Corp. yesterday abruptly postponed until Wednesday the special stockholder meeting it had scheduled for today to vote on changes in its corporate charter that would make it easier to fend off a Martin Marietta Corp. takeover bid.
Bendix took the action after Martin Marietta filed suit yesterday to challenge the rights of the trustee for the Bendix employe stock ownership plan to vote the plan's 4.5 million shares on the charter changes. Bendix said it postponed the meeting after the judge in the case, which is being heard in federal district court in New York, requested more time to evaluate the issues.
Meanwhile, Bendix said it had increased its holding in Martin Marietta to 70 percent of the company's stock. Bendix, which paid about $1.2 billion for the stock, has said it plans to obtain the remaining Martin Marietta shares by exchanging Bendix stock for them.
"We are pleased to be the overwhelming majority shareholder of Martin Marietta," Bendix Chairman William Agee said. "It is a fine company, and we are moving ahead on course with our plans to merge Martin Marietta into Bendix."
Bendix, however, has not gained formal control of the Bethesda aerospace company and has filed suit in federal district court in Baltimore seeking to halt Martin Marietta's counteroffer for Bendix. In this suit, Bendix also seeks to force Marietta to conduct a shareholders meeting Sept. 30 to elect a Bendix-picked board of directors. That case is scheduled to be heard today.
Marietta, which is offering $75 a share for Bendix, can begin buying the Michigan-based company's stock on Thursday. Last week, Marietta said 63 percent of Bendix's stock had been pledged to it. Analysts say there is a possibility that the two companies will wind up owning a majority of each other, leaving the outcome of the battle up to the courts.
The third player in the complex takeover fight, United Technologies Corp., remained mum yesterday on its plans. UTC, which entered the fray at the request of Martin Marietta with its own $75-a-share offer for Bendix and a proposal to sell part of Bendix to Marietta if the acquisition is successful, had said it would drop out if Bendix bought any of Marietta. Yesterday, however, UTC said it was still reviewing its options and was continuing to support Marietta.
Bendix's decision to postpone its meeting by a day -- to 10 a.m. Wednesday at corporate headquarters in Southfield, Mich. -- came hours after Martin Marietta lost an attempt to have it blocked outright. A state court in Delaware, where Bendix is incorporated, rejected Marietta's request to stop the meeting from occurring. Late in the afternoon, Marietta filed an appeal to that decision.
Testimony continued all day yesterday in Marietta's court challenge in New York of the voting rights of Citibank, the trustee for the Bendix employe stock ownership plan. In the case, Martin Marietta is asking the court to order Citibank not to vote any of the shares on the Bendix proposals without specific orders from individual holders of the shares. The proposed changes in the Bendix charter would hamper the attempts of Marietta -- or anyone else -- to take over Bendix.
Last week, Marietta won a similar court battle when it blocked a Bendix attempt to stop Citibank from pledging the 4.5 million-share block to Marietta's offer for Bendix. The block represents about one-third of the shares pledged to Marietta. In the ruling in that case, which Bendix has appealed to federal appeals court, Citibank was ordered to withdraw shares from Marietta only if specifically told to by shareholders in the plan, which covers about 16,000 Bendix employes. Bendix wants the shares pledged only if the holders request it.
In the latest action, Marietta is requesting that Citibank vote shares for or against the Bendix proposals only on specific instructions from shareholders in the plan. It is seeking to block Citibank from voting the whole block on the proposals.
If the Bendix proposals are passed by its shareholders, Marietta could face a severe disadvantage in the battle. As it now stands, Bendix must wait a week before it can gain formal control of Marietta, according to Maryland law. But under Delaware law, Marietta could take control of Bendix as soon as it bought a majority of the company. It could then theoretically force Bendix to return the stake in Marietta it has bought, although securities analysts are not sure what the mechanism for this might be.
In a related development, Bendix attempted yesterday to rally its employes around the company's cause. The company said 50,000 employes at 100 plants in the United States and Canada took part in "Bendix Unity Day" pep rallies -- complete with high school marching bands and speeches by company officials and local politicians.